On Monday, March 16, during early Asian trading hours, gold prices saw a sudden flash crash, temporarily falling below the key $5,000 mark to a low of $4,967, marking the lowest level in nearly a month. While the market had initially anticipated that gold would perform strongly amid geopolitical conflicts, it has been heavily pressured by the robust rise of the U.S. dollar and inflationary concerns stemming from escalating tensions in the Middle East. Although the long-term asset allocation rationale continues to support a bullish outlook for gold, the U.S. dollar has surged to a nearly four-month high since the outbreak of the Iran conflict, causing gold prices to repeatedly test lower levels. This dual impact of a strong dollar and ongoing warfare has placed gold in an unprecedented short-term predicament.

The current pullback in gold prices results from the convergence of multiple factors: persistent dollar strength, rising inflation expectations, and delayed expectations for Federal Reserve interest rate cuts. As long as oil prices remain elevated and yields continue to face upward pressure, gold is likely to remain under pressure in the short term and may even test lower support levels.

Internationally, gold has recently exhibited wide, volatile fluctuations with a bearish bias. From a macroeconomic perspective, liquidity demand persists against a backdrop of global crises, warranting continued caution toward gold and silver in the near term. After opening lower today, gold quickly fell below the $5,000 threshold, hitting a low of $4,967 before rebounding. It is currently trading around $5,000, undergoing a phase of consolidation. From a technical standpoint, the daily chart shows a weak trend following three consecutive negative sessions. However, traders should remain alert to the possibility of a sharp rebound triggered by geopolitical developments, emphasizing caution when the market records three straight negative daily closes.

Following today’s opening, gold extended its decline to $4,967 before rebounding to around $5,030. The pattern of lower openings followed by recoveries during Asian hours remains intact. Short positions are not advisable during the Asian session; instead, a strategy focused on buying on dips is recommended, with consideration of short positions during European or U.S. trading hours. Immediate resistance for gold is concentrated in the $5,030–$5,050 range, with stronger resistance near $5,070. Long positions may be considered around $4,980. If the rebound loses momentum, downward pressure may persist. The $4,950 level is a critical support zone; a decisive break below it could accelerate declines, potentially testing the pre-Lunar New Year low near $4,850. The current trading strategy for gold favors selling on rallies.